How can firms take advantage of special customs regimes?

What are some of the customs processes available?

There are a wide range of options that fall into this category, which may well have different names and terminology depending on the jurisdiction. However, they commonly allow companies to import goods on a temporary basis without paying any duties, store or process them within a country's territory and then either re-export them or release them into the domestic market.

Common special customs regimes that are available to businesses include:

Bonded warehouses: This refers to secure areas within a territory in which goods may be stored or processed before entering a country's customs regime. These can allow firms to stockpile items closer to their end destination or undergo value-add manufacturing processes without significant upfront costs.
Inward processing relief: This allows companies to avoid paying import duties on items that will later be re-exported, offering greater flexibility in the supply chain.
Outward processing relief: As the name suggests, this is the opposite of inward processing relief, allowing firms to ship goods out of a territory for processing offshore and then claim full or partial relief from duties when they are re-imported.
Foreign trade zones: Sometimes called free zones, designated areas that goods can be shipped to and from without paying duties can help manage inventory, streamline logistics and bring goods to market faster without impacting a firm's cashflow.

The benefits of using special regimes

Understanding the nuances of each individual customs regime is important in determining which options will be the most suited to a particular business. For example, manufacturers can often benefit from inward processing relief to bring component parts to a central facility, process them, then export finished products around the world. Indeed, one study by the European Commission noted that in the EU, more than 40 percent of exported vehicles were manufactured using the bloc's inward processing regime.

These options enable companies to take advantage of lower labor or manufacturing costs around the world, while being able to store goods in bonded warehouses without paying import tariffs enables firms to respond more quickly to fluctuations in customer demand.

Key tools to help navigate these environments

In order to take advantage of these opportunities, firms will need to follow specific requirements. Depending on the regime, they may have to register with the relevant customs authority and send regular reports, which may include details on exactly what goods are being shipped, stored or processed and what the countries of origin are for each component.

Many regimes, such as the US' duty drawback scheme, also allow companies to claim retroactively, so being able to keep full records and access them quickly when needed is also important.

To meet these requirements and take full advantage of special rules, it pays to have the right customs processing software to hand. Key features to look out for when considering options include:

Full inventory management tools

Complete audit trails

Calculation and alerts for customs relief expiry dates

Full tracking and traceability capabilities across multiple inventories

Automated requests for information from suppliers and submission of reporting to customs authorities

With the right tools on hand, it should become much simpler for firms to streamline their imports and exports to take advantage of any special custom regime around the world, without having to worry about paperwork or reporting requirements.

MIC Products | Axonn Ltd | MIC Customs Solutions | 4 December 2024

What should firms be aware of when investigating what special customs regimes around the world have to offer to importers and exporters?

With global trade facing an uncertain time and the prospect of new tariffs and other restrictions on free trade coming into force in the year ahead, it's vital that importers and exporters act quickly to optimize their supply chains and ensure they are doing everything possible to keep their costs to a minimum.

One way to achieve this is by looking at some of the many special customs regimes that are open to traders. This can help businesses avoid some of the duties they would otherwise face when shipping raw materials, components or finished products around the world. Knowing which of these will be relevant is essential in ensuring operations are as cost-effective and streamlined as possible.